Startup Deep Dive : Zepto — revenue doubled in FY26 and so did the loss

Zepto’s revenue more than doubled to ₹22,623 crore (about $236 million a month, at $1 ≈ ₹96.0) in the year to March 2026, according to the updated draft filed with India’s market regulator for its initial public offering. In the same filing, its net loss also grew, to ₹5,905 crore. Seven months before that filing, investors had priced the company at $7 billion. By July 2026, domestic mutual funds buying into its pre-IPO round were reportedly willing to pay for only $4.5 billion. A company can double its business and still watch the market cut two-fifths off its price tag in the same year — that contradiction sits at the centre of Zepto’s story, and it is worth working through why.

Founded in July 2021 by two teenagers who had dropped out of Stanford, Zepto sells a promise most Indian shoppers had never had reason to expect: milk, medicine or a phone charger delivered in ten minutes. It built that promise on a network of company-run “dark stores” rather than kirana-store partnerships, competed its way into a three-cornered fight with Blinkit and Swiggy Instamart, moved its own legal domicile from Singapore back to India, and is now trying to convince public-market investors that a business built for growth can also be priced for profit. This piece works through what it sells, how it nearly failed twice, what changed its trajectory, how the money actually moves, and where the real risks sit.

Quick facts

What they do

Zepto runs a mobile app that promises delivery of groceries, fresh produce, medicines, electronics accessories and household items to Indian city dwellers within about ten minutes of ordering, sold from small warehouses called dark stores that sit within a couple of kilometres of the customer rather than from a regular retail shop. The customer is typically an urban, app-first shopper willing to pay a delivery or handling fee for speed on small, frequent baskets — the kind of last-minute or top-up purchase that used to mean a walk to the neighbourhood kirana store. Zepto owns the inventory and the delivery fleet in each dark store’s catchment, which is what lets it promise a fixed delivery time rather than the variable one a marketplace model produces.

The origin

Aadit Palicha and Kaivalya Vohra grew up as friends in Mumbai, both got into Stanford to study computer science, and both dropped out within their first year to build a startup in India, as reported by Business Today in November 2021. Their founding insight was narrower than “grocery delivery is broken” — it was that Indian consumers already tolerated ordering food in 30 minutes, so a platform that could cut essentials delivery to a fraction of that time would change buying habits rather than just digitise them. Their first attempt, a company called KiranaKart, tried to build that speed by routing orders to existing neighbourhood kirana stores. It launched and failed within months of starting, because partner stores could not guarantee consistent inventory, and store owners had no reason to prioritise a stranger’s ten-minute promise over their own walk-in customers.

The struggle years

Two setbacks stand out, both with dates attached. The first came within Zepto’s own founding year: KiranaKart’s marketplace model, launched mid-2021, was scrapped inside a few months because it could not deliver the speed the founders had promised, and the company relaunched as Zepto with owned dark stores replacing partner kirana stores — a full reset of the operating model before the business had even found a name people would remember. The second came much later and was slower-moving: through 2025, as Zepto raised $450 million at a $7 billion valuation in October, it also cut 200 to 300 jobs and sharply slowed the pace at which it opened new dark stores, adding only about 105 net stores in the quarter to March 2025 — less than half the pace of its competitors, according to reporting cited by TechCrunch and StartupNews.fyi. Datum Intelligence data cited by Reuters in January 2026 showed Zepto’s daily active users falling from 5.5 million in December 2024 to 4.9 million by June 2025, even as Blinkit’s rose to 6.2 million over the same stretch — a rare instance of a quick-commerce player losing users while its category kept growing.

The turning point

The clearest before-and-after moment is the one still playing out: Zepto’s push toward a public listing. In December 2025 it filed a confidential draft IPO prospectus, then raised $450 million from CalPERS and existing backers in October 2025 at a $7 billion valuation — a number set by growth-stage private investors who had not yet had to defend the price to public-market fund managers. By July 2026, as Business Standard reported, that defence had gone badly enough that Zepto paused the IPO itself and instead moved to raise about ₹1,000 crore from domestic investors at a valuation of roughly $4.5 billion — a cut of close to 40% from the October figure, driven by domestic mutual funds and insurers unwilling to pay the earlier price given the widening FY26 loss. The IPO, once targeted for mid-2026, is now expected between February and May 2027. The event matters because it is the first time Zepto’s growth story has been priced by investors who could say no, rather than by the next round’s lead investor.

The money behind it

Zepto has raised more than $2.45 billion across roughly a dozen rounds since 2021, according to Inc42’s funding tracker. Three backers changed its trajectory in distinct ways. Nexus Venture Partners came in at the seed stage in October 2021, when the company was still KiranaKart, and stayed through nearly every subsequent round, giving Zepto continuity of a lead domestic investor through its pivots. StepStone Group led the August 2023 round that made Zepto India’s first unicorn of that year, at a $1.4 billion valuation, converting it from a well-funded startup into a reference name for the category. CalPERS, the large US pension fund, led the October 2025 round at $7 billion, a signal that institutional, IPO-adjacent capital was willing to underwrite the business just ahead of a public listing — a signal since complicated by the July 2026 valuation reset. Other participants across rounds have included Avenir Growth, Lightspeed, Glade Brook Capital, Avra, DST Global-linked entities and Y Combinator’s Continuity fund. As part of preparing for the IPO, Zepto also completed a “reverse flip” in January 2025, moving its holding company from KiranaKart Pte Ltd in Singapore to KiranaKart Technologies Private Limited in India, after clearing the National Company Law Tribunal, as reported by Entrackr and Business Standard.

How it makes money

Most of Zepto’s revenue is simply retail margin: it buys products wholesale and sells them at a markup through the app, which the FY26 filing shows as “product sales” worth roughly ₹17,588 crore, or about 78% of operating revenue, per Entrackr’s reporting of the UDRHP. Layered on top are three smaller but faster-growing lines: delivery and handling fees charged to the customer; on-platform advertising, where brands pay to appear higher in search and category pages; and platform or partner services. Advertising is the one worth watching closely, because it carries far higher margin than selling groceries: it grew from about ₹49 crore in FY24 to ₹651 crore in FY25 to ₹1,636 crore in FY26, a roughly 33-fold rise in two years, according to Outlook Business’s reading of the same filing. The company’s own per-order economics improved over the same period — its per-order loss narrowed to ₹78.75 in FY26 from ₹136.15 in FY25 — but the retail side still loses money on the product itself once procurement, packaging, warehousing and delivery costs are added in; the “part people get wrong” is treating advertising revenue as if it were a bonus on top of a working grocery business, when it is closer to the only genuinely profitable line management currently has.

The numbers

The table below uses Zepto’s standalone entity filings with the Ministry of Corporate Affairs for FY22 through FY25, which are reported on a consistent basis year to year. For FY26, Zepto reported for the first time on a consolidated basis as part of its SEBI IPO filing — a broader accounting scope that also restates FY25 revenue upward to ₹11,109.9 crore and the FY25 loss to ₹4,695 crore, so the FY26 figures below are not directly comparable to the standalone years above them; both bases are audited, and the shift itself is disclosed in the filing.

Read across even the standalone years alone, revenue rose roughly 68-fold between FY22 and FY25 while the loss rose about 8.6 times — the top line has consistently outpaced the loss in percentage terms, which is the case the company is making to prospective public shareholders, even as the absolute rupee loss keeps climbing.

Where the money comes from

Zepto does not break out revenue by state or city in public filings, but its dark-store count is a reasonable proxy for where the business actually sits: 1,139 dark stores as of the FY26 filing, according to Entrackr, concentrated in India’s largest metros — Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata account for the bulk of quick-commerce demand industry-wide, per Datum Intelligence data cited by Reuters. The surprise is less geographic than categorical: management’s own emphasis, visible in the jump in advertising revenue, is that a meaningful share of incremental profit is now coming from brands paying for shelf space on the app rather than from consumers buying more groceries — a dynamic closer to a digital retail-media business layered on top of a logistics network than to grocery retail in the traditional sense.

The risks

Three risks are concrete rather than generic. First, a Foreign Exchange Management Act probe: the Enforcement Directorate issued summons dated 8 April 2026 to both founders, seeking details of foreign investments, audited balance sheets since FY21, shareholding patterns and bank records, as disclosed in Zepto’s own IPO filing and reported by MediaNama; both founders appeared before the ED through April and May 2026, and the company has said the matter could still escalate into penalties. Second, regulatory action over “dark patterns”: the Central Consumer Protection Authority fined Zepto Marketplace ₹7 lakh in December 2025 for pre-ticked membership fees and undisclosed handling charges, an order currently under an interim stay from the National Consumer Disputes Redressal Commission, with a second CCPA notice over drip pricing still pending as of the filing. Third, labour and gig-worker friction: delivery partners struck over payouts in Hyderabad in May 2025 and over Diwali incentives in Delhi in October 2025, and a September 2024 criminal complaint alleged Zepto failed to maintain statutory wage registers — risks that sit directly against a business model whose unit economics depend on keeping delivery cost per order low.

The takeaway

The lesson in Zepto’s numbers is not “growth at all costs eventually works” — its own FY26 filing shows losses still rising in absolute terms even as the growth rate impresses. The more transferable lesson is that a business can fix its unit economics — Zepto’s per-order loss did narrow, from ₹136.15 to ₹78.75 — while its enterprise valuation moves in the opposite direction, because public and late-stage private investors are pricing the absolute loss and the cash still being burned to fund expansion, not the improving trend line alone. Founders chasing growth-stage metrics should note that the market that eventually prices you does not grade on the curve of your own prior quarter.

Frequently asked questions

Who founded Zepto and when?

Aadit Palicha and Kaivalya Vohra, both Stanford dropouts, founded the company as KiranaKart in July 2021 in Mumbai and rebranded it Zepto within months of launch, as reported by Business Today.

How much money has Zepto lost?

On a consolidated basis disclosed in its SEBI IPO filing, Zepto reported a net loss of ₹5,905 crore in FY26 (year to March 2026), up from a restated ₹4,695 crore in FY25, according to Entrackr and Outlook Business.

What is Zepto’s latest valuation?

Zepto was valued at $7 billion in an October 2025 funding round led by CalPERS. Business Standard reported in July 2026 that a subsequent pre-IPO round was being discussed at around $4.5 billion, roughly 40% lower, as public-market investors pushed back on the price.

Who are Zepto’s main competitors?

Blinkit (owned by Eternal, formerly Zomato) and Swiggy Instamart. Datum Intelligence data cited by Reuters in January 2026 put Blinkit’s market share at 46–48%, Instamart’s at 24% and Zepto’s at 22%.

Is Zepto planning to list on the stock exchange?

Yes. Zepto filed a confidential draft IPO prospectus in December 2025 and an updated draft with SEBI in 2026, but paused the public listing in July 2026 in favour of a domestic pre-IPO round; the IPO is now expected between February and May 2027, per Business Standard.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “Zepto doubles revenue in FY26, losses widen to Rs 5,905 Cr”, September 2026
• Outlook Business, “IPO-Bound Zepto Doubles Revenue in FY26 But Losses Reach ₹5,905 Cr”, September 2026
• MediaNama, “Zepto IPO filing discloses ED summons, dark patterns, losses”, June 2026
• Business Standard, “Zepto pauses IPO, to raise Rs 1K cr in pre-IPO round at $4.5 bn valuation”, July 2026
• TechCrunch, “Zepto raises $450 million at $7 billion valuation as Indian quick commerce market heats up”, October 2025
• Business Standard, “Quick commerce unicorn Zepto completes reverse flip from Singapore to India”, January 2025
• Entrackr, “Zepto completes reverse flip from Singapore to India”, January 2025
• AngelOne, “Zepto’s FY25 Loss Rises to ₹3,367 Crore Despite 129% Sales Growth”, September 2025
• Business Standard, “Zepto slightly cuts losses to Rs 1248.6 cr, revenue doubles in FY24”, December 2024
• Business Standard, “Quick commerce platform Zepto’s FY23 losses widen 3x to Rs 1,272 crore”, October 2023
• Inc42, “Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr”, November 2022
• Inc42, “Zepto Funding 2026 – Total Funding, Rounds & Investors”, October 2025
• Business Today, “How two 19 year old Stanford dropouts founded Zepto”, November 2021
• Business Today, “Zepto becomes India’s first unicorn of 2023, raises $200 million at $1.4 billion valuation”, August 2023
• TechCrunch, “Zepto’s expansion dilemma” reporting and StartupNews.fyi, “Zepto’s Expansion Dilemma”, October 2025
• startupfeed.in, “Quick Commerce War 2026: Blinkit Tops Brutal 6-Way Fight”, citing Datum Intelligence/Reuters, June 2026
• Storyboard18, “Dark stores explained: How Blinkit, Zepto are building dense networks for quick commerce growth”, April 2026

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